Sun Do sells key chains with leather fobs for $12 and $9. The key chains are very similar and have identical manufacturing costs. The difference is that the stitching on the leather fob is in a less precise pattern on the $9 key chain than it is on the $12 key chains. What approach to price discrimination is Sun Do using?
A)Shopping around as a form of group pricing.
B)Segmenting the market through bad service.
C)Offering imperfect goods as part of the hurdle method.
D)Offering alternate versions through timing as part of the hurdle method.

Question

Quizplus · Accepted Answer

Sun Do is using the hurdle method of price discrimination by offering a version of the product (the key chain with less precise stitching) that is perceived as imperfect or of lower quality, thus creating a "hurdle" for those not willing to pay the higher price for the more precisely stitched version.

Sun Do Sells Key Chains with Leather Fobs for $12